# In a fractional reserve banking system like the one in the U.S., new deposits are

Question: In a fractional reserve banking system like the one in the U.S., new deposits are created when Multiple Choice a person takes money out of one bank and puts it in another bank. a bank lends money. a person takes money out of the banking system and holds it as cash. All of these options are correct. a bank borrows dollars from the Federal Reserve.See the answerSee the answerSee the answer done loading

In a fractional reserve banking system like the one in the U.S., new deposits are created when

Multiple Choice
a person takes money out of one bank and puts it in another bank.

a bank lends money.

a person takes money out of the banking system and holds it as cash.

All of these options are correct.

a bank borrows dollars from the Federal Reserve.

Suppose a consumption function is given as C = \$800 0.5YD. The marginal propensity to consume (MPC) is

Multiple Choice
0.5

None of these options are correct

5

\$800

0.15

Suppose a bond is issued with an annual interest rate of 6% and a face value of \$1,000. You buy the bond for \$900. What is the yield of this bond you have purchased?

Multiple Choice
4.67 %

60.00 %

6.67 %

None of these options are correct.

6.00 %

Q1) Answer = a bank lends money. Q2) Answer = 0.5 Q3) Answer = 6.67 % Explanation: Q1) Answer = a bank lends money. Explanation: In a fractional reserve banking system, the bank keeps a certain percentage of deposits as required reserves and is able…View the full answer